finance question

Question # 00004518 Posted By: neil2103 Updated on: 12/03/2013 05:01 PM Due on: 12/31/2013
Subject Finance Topic Finance Tutorials:
Question
10-1 – NPV
A project has an initial cost of \$40,000, expected net cash inflows of \$9,000 per year for 7 years, and a cost of capital of 11%. What is the project’s NPV? (Hint: Begin by constructing the timeline)

10-2 – IRR
Refer to problem 10-1. What is the project’s IRR?

10-3 – MIRR
Refer to problem 10-1. What is the project’s MIRR?

10-4 – Profitability Index
Refer to problem 10-1. What is the project’s PI?

10-5 – Payback
Refer to problem 10-1. What is the project payback period?

10-6 – Discounted payback
Refer to problem 10-1. What is the project discounted payback period?

10-7 – NPV
Your division is considering two investment projects, each of which requires an up-front expenditure of \$15 million. You estimate that the investments will produce the following net cash flows:
YEAR PROJECT A PROJECT B
1 \$ 5,000,000 \$20,000,000
2 10,000,000 10,000,000
3 20,000,000 6,000,000
A. What are the two projects' net present values, assuming the cost of capital is:
a) 5%?
b) 10%?
c) 15%?
B. What are the two project’s IRRs at the same cost of capital?

Tutorials for this Question
1. Solution: finance question

Tutorial # 00004317 Posted By: neil2103 Posted on: 12/03/2013 05:02 PM
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